Human Resource Management

Any system has the following core features – Inputs, Processes & Procedures, Output, and Feedback. When we think of HRM systems, we can look at these features as

  • Inputs- People with their Knowledge, Skills, Abilities, and personalities.
  • HRM Processes, Procedures, and Policies
  • Outcomes- Organizational Perspective and Employee Perspective
  • Feedback – Internal or External

Core objectives of any HRM system from Org side

  • Productivity or Performance (Ability * Motivation* Opportunity)
  • Job Satisfaction
  • Motivation or Engagement
  • Low Attrition

Objectives from Employee side

  • Employee Contract: When an employee joins a company, there is a formal contract between employee and company. It is HR’s responsibility to make sure terms are fulfilled (leaves, medical benefits, etc)
  • Psychological Contract: A more important aspect from the employee’s side is a psychological contract which is unwritten, for example, the firm will help employees to learn and grow.

HR system has following processes

  • Recruitment and Selection
  • Orientation
  • Performance Management -> Compensation (Increments & Incentives), Training and development
  • Exit Processes

HR Environment impacting policies

External

  • Economic
  • Product Market
  • Labor Market
  • Government regulations
  • Social environment

Internal

  • Organization Culture
  • Business strategy
  • Org Size
  • Leadership
  • Technology
  • Lifecycle stage

Any organization goes through various lifecycle stages like startup -> Growing -> Mature -> Decline. HR policy will be impacted by the current stage of the organization. For example, an org in the startup phase will have different policies to attract organizations like profit-sharing in terms of ESOPs.

HR Strategies

Innovative Strategy: Firms need employees to be innovative, risk-taking, develop new skills, and exchange ideas. Firms allow employees to become stockholders by providing stock options as part of pay.

Quality Enhancement Strategy: Firms that are looking to gain a competitive advantage by improving the quality of products and production. Mostly comes with a fixed job description but employees need to be flexible and adaptable to new technologies. Performance appraisals are mostly short-term and result-oriented.

Cost reduction strategy: Firms with relatively fixed and explicit job descriptions try to gain a competitive advantage by cost reduction strategy. Narrowly designed career paths encourage specializations, expertise, and efficiency. Appraisals are short-term and result-oriented.

Different organizations are looking for different aspects in an employee. For example, a startup would look for employees

  • Risk-taking
  • Ready to experiment
  • Tolerance for failure- fail fast and learn
  • Entrepreneurial
  • Problem solver
  • Handle ambiguity

Innovation = AMO (Ability * Motivation * Opportunity)